protect the voters, i think, with programs that will affect them. what is the message here? they're the cause of the growing deficits? >> the message is you're not going to do much to solving our financial problems with the debt, until you deal, make some adjustments -- no one is talking about doing away with social security, medicaid or medicare, until some adjustments are made and accepting that 70 is the new 30 in this country with the actuarial tables. until they come to grips with that, the rest is smoke and mirrors. >> just to back up this concern, look at this right now, medicare and medicaid are 5% of the g.d.p., of the overall competent. they're growing 10%, 9.6% by 2037. this is a reality. we're skipping it. how are we going to deal with the debt problem if we skip the main causes of it? >> american doesn't have a deficit problem. it has a health care problem. it has to face the reality that

you raise revenue by something like 30% in order to pay for the social contract as it exists today for retirees and retirees, present or future, richer or poorer are going to have their services slashed or the final thing you can do. you can try to bring down health care costs. half of the rise of american health care spending is because costs are rising. chris: how do you do that? >> in the end, it means fewer services. we had a social contract where the last generation has been promised things that governments can no longer afford. it's not happening here, it's happening in europe as well. chris: what does it mean to be entitled? under the law at 65, you get all of the health care you need. doctors tell me or at least one doctor told me, people come in and they say give me everything and i don't want to pay for anything. >> in a way, you can argue what we have here is a branding problem. we need a rebranding of some of these things. they're not really entitlements.

there is no guarantee under the law. it's a benefit. in that sense, just as companies are cutting back on benefits, the government at some point, everyone knows, has to cut back on benefits also. chris: the word we never say is socialism. in effect, once your 65 in this country when it comes to health, you're guaranteed to be taken care of. >> we're all socialists from the day we're born. you don't have to be poor and unemployed to be on welfare. we're all at the trough. we're all health care queens. my parking is subsidized. you're very subsidiesed. the whole country is built on a series of assistance. chris: explain to the skeptic. >> you don't get direct payments in the form of social security or medicare. you get it in tax benefits for your house or child care or commuting or parking. it's a totally subsidized nation. one nation subsidized.

>> big corporations, people make money with subsidized as well. >> the notion that it's a few people, it's all of us. chris: staying on this point, i don't know anybody that says i don't want medicare. warren buffett takes it or not, people get it because it's free. >> people ask for all kinds of tests and probings to whether they need them or not. it's going come for nothing. >> we have the worst of both worlds. we have socialism and capitalism. chris: the president said to boehner let's talk about it. they're talking about it. the president has pulled back. he won't say a word or tweet, no mention of medicare. on the other side they don't want to touch taxes. are we going to have a president, in this case, a progressive president deal with this thing? >> they're looking at the voters that come from the baby boom generation and they risk turning the generation off.

at the moment, they're too scared to do it. for the long-term health for the country, the sequester is doing the wrong thing. the kinds of things that are being cut are going to produce growth in the future. chris: the polling this week at nbc said they don't like the way it's being done. better this than nothing. if they know congress isn't doing anything. don't anybody think they're going to do it? >> they won't do it at the moment. when they try to do it, they get scared saying they're trying to hurt our seniors. chris: we're healthier and living longer and better, which is a better thing, 65, 70. can we go to 70? is it a smart move or create more people with bad health until they reach 70 having not taken care of themselves and loaded themselves on the private health care systems. for five years they don't get help and they walk in the door, 70, how about that operation? >> i think at some point everyone realizes, everyone,

democrats, republicans, they have to scale back. they're not going to do it this year. down the road, sure. >> the economic argument against doing that, you push people into medicaid. so you reduce spending on medicare, you bump up spending on medicaid because if they're not working, they have to find health care from somewhere else. chris: it's another attempt to force a middle solution here. they come back with reform and simpson and bowles are smart guys. they know we have to do it. we agree something has to be done. the political question is -- who is going to do it and will they do it if they do it together? >> the conversation in washington about entitlement reform has moved backwards in the last three months, not forward, backwards. bill clinton was having a more robust conversation about social security in 1993 than we have had in the last five years. obama, john boehner talks of 2011 were far more down in the weeds of themes details and

cutting a lot more in their conversation than they were talking about. chris: why? >> i think when obama was re-elected, the democratic party said to him, you don't have to compromise with these guys anymore. you have a mandate now. they went into fiscal cliff talks in december and except for a 24-hour period had no mention of entitlement cuts. we have moved back in the last six months from where they were. chris: it seems to me that we're back on this polarization that we're talking about. the hard right, leave my guns alone. i'm not paying a dollar more in taxes. i hate the federal government. they're very polarized. on the left, ok, i got a few things i'm getting from the government, don't take them away from me. >> i think that's true. what is called for here is leadership. if you can't get this done, which is to say, face up to problems of entitlement with a second-term president who is not running for re-election the next time and a progressive president.

if you can't get it done with him over the next 3 1/2 years, i simply don't know when you'll get it done. this is a moment to do it, the cry for leadership. a few men and women can do it under the president's leadership, just a few in the senate and house who are prepared to say, i'm going to pay the price at the polls if i must, but i'm going to lead this country through this problem. chris: great idea. this is exactly right, then do it. i'm with you. the bottom line is we put to the matthews meter, 12 of our regulars including katty and mike here, will there be significant reform in the presidency as dan brought up, seven say yes, five say they won't be. two of those five are here. katty? >> i just don't see the political viability of going to voters and say we're going to cut your services. to retirees who are the majority of the voters, listen, we just had a government thrown out of office in italy precisely because it did this. it cut services.

>> i'm in the no camp. six months ago, yes. i'm less certain and the odds are narrowed. >> i agree. i think it goes to what you said earlier also. the only way this will happen is both sides do it together rather than one side take the blame. right now they don't trust each other. chris: if we don't do entitlement reform, medicare, medicaid, we're not going to do tax reform because republicans will never go along with a democrat. therefore, we're not doing anything. that's a scary part. 3 1/2 years of not getting anything done. for comic relief, every time we have a budget battle, we recall the grand daddy of them all. 1995 and the government shutdown. here is the funny part. a driving force behind the shutdown, believe it or not, was speaker newt gingrich's personal beef about his treatment aboard air force one.

>> speaker newt gingrich revealed that a personal snub from president clinton led to the current standoff. gingrich complained in the 25-hour flight on air force one for the funeral, the president refused to talk to him and senator bob dole about the budget, then forced them to exit from the rear of the plane on return. chris: that gave "saturday night live" the perfect premise. >> has any other speaker of the house ever been subjected to this kind of total lack of respect? >> pipe down, we'll fix his wagon when we get back to d.c. >> excuse me, men, men, those are looking very tasty, if i could have one of those? >> these scones are for the president. when i come back, i'll try to find one for you and the senator. >> that's wonderful. bob dole has to beg for a damn biscuit. >> are you a little cranky today, mr. senator? tighten your seat belts, ok,

thanks. [laughter] >> how is the flight so far? >> mr. president, we were hoping to talk about the budget. >> maybe later, newt. i'm going to use yours right now. >> mr. president, bob dole has flown on air force one 100 times. bob dole -- good lord, mr. president, mr. president, damn it. ah! >> when we come back, the water cooler talk this week was about the new rule at yahoo!. everyone working at yahoo! from home must now report for duty in the office. will that catch on and bring telecomm screeching halt. plus "scoops and predictions" from the notebooks of these reporters. from the notebooks of these reporters. we'll be right back.

chris: welcome back. sometimes big national debates spring up unexpectedly. this happened this past week. the young mother who is the c.e.o. of yahoo! surprised her own company and millions of other that everyone at yahoo! must hence forth the work from the office, no longer working from home. they are more productive and if they're there in the office interacting with their colleagues face-to-face. that isn't the trend with workers raising a family. a quarter of the employees work at home. 2/3 of american employees allow this practice. that has doubled since 2005. katty, this is a screeching discussion, i'm not sure if employees get to decide. their bosses get to decide. what do you think about this? >> it's huge. she has to shake up yahoo!. she has to do something to change the company.

she clearly thinks this is the way to go. the evidence that companies that allow employees to work flexibility, product itself increases overall. it started out with working mothers to try and keep talented and particularly talented young working mothers who find that clocking in at 8:00 in the morning and out at 6:00 in the evening drives them to the brick wall where you have to choose between kids and career. kids end up winning. chris: we have a case in point. liz marlantes, who is a mother and about to be again, you have had to make compromises and make arrangements. how does it work for you? >> i work from home primarily. chris: you're a reporter. >> i don't think i could, if i couldn't work from home, it would be really, really difficult. there is no question -- chris: are your stories and reporting, is it at good? >> yeah, i think productivity is better for me working from home. you save commuting time. you save that half hour going out to get a sandwich, your fridge is right there.

you know you're being judged on your output rather than how much time you spend sitting there. chris: let's go to the negatives. the gab time, dan and i were talking about it. it's all about collaboration. these things are put together with people with ideas back and forth. >> i think it depends on the job. there are some jobs where collaboration is more important. my job it's a little less important than in some other fields. chris: we have someone in management, michael duffy. >> i have a lot to say in this context. this is a high class problem to have. most americans don't have the option. chris: you can't be a flight attendant at home. >> the technology company that was supposed to give us all of the special tools and gadgets that would allow us to telecommute or whatever it's called is the first to step back. it's interesting that it's a woman way child. chris: which way is the trend? >> the trend is still toward doing this. >> more flexibility. >> yahoo! had to rebalance.

chris: i think this is an issue that our families have talked about. our kids are away now. if women go to college, and i go back to the basics. if women get the same quality education as men in our society and appropriately so, why would you want them out of the workforce? you should be allowed to be a mother and a worker. >> it's not that you should be allowed to, it's the economy can't afford to lose us. there are a dozen international studies out there that show that companies that employ more senior women make more money. this is a bottom line issue. companies need to figure out how to keep us in the workforce and flexibility is one way. >> dan. >> this is work specific. if you have a job as a waitress, you can't do that job from home. if you are a brick builder or a rouseabout, you can't do that job from home. let's be clear. we're talking about a certa segment of the economy when we discuss this. for a certain segment of the competent, i have no doubt that productivity is at least equal

and superior in certain kind of work situations. chris: help with the definitions. when we come back, "scoops and predictions" from the notebooks when we come back, "scoops and predictions" from the notebooks of [ traffic passing ] ♪ [ music box: lullaby ] [ man on tv, indistinct ] ♪ [ lullaby continues ] [ baby coos ]

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let's try together. ♪ ♪ perfect. two worlds that fit in one kitchen. come in today and save up to 20% on a kitchen from ikea. chris: welcome back, dan, tell me something i don't know. >> emerging problem, a really exploding problem of big-time operators in places like jamaica and nigeria preying on our

elderly and lonely people with telemarketing and lottery fraud. look out for some senate hearings coming down the line. this is getting to be a big problem. some of the people who were in the drug business have found that there is less enforcement and more money to be made in preying on these older lonely people. they hop on them like a hawk on rabbits. chris: are these phony -- >> they're phony all the way through. they bilk people out of large sums of money. nobody has a grip on how much, but this is easily a $200, $300 million -- >> katty. >> there is a lot of concern about what happened in afghanistan, particularly to women after the nato forces withdraw, but we have just had had a story on the bbc this week saying that sales of burquas have gone down. their covering their heads with scarves. women in certain parts of afghanistan seem to be more

liberated. >> the point of how we got to this sequester impasse. the club for growth unveiled a new website called primary my congressman. they put up nine different members, republican members of congress who they are actively seeking out people to run against in the primary because they didn't vote the way the club wanted on spending and taxes. chris: tomby is safe in pennsylvania. >> another sign of trouble in the republican party, a fight brewing between mark rubio who would like to lead the party out and into the promised land and lindsey graham and john mccain. they're just the guys to do it. so old versus young. a little bit more moderate versus less moderate. the chris: who is more moderate? >> mccain and graham are more moderate. of the two, mccain is more moderate than lindsay. chris: the cuban american guy, if you will, from his background

is tougher on immigrants. >> cubans get in for free. chris: when we come back, the big question of the week, has president obama put himself at political risk if the big cuts do not

chris: welcome back, this week's big question, has president obama played the sequester politics shortly, dan rather? >> yes, he runs the risk of coming out on the short end. you can't say the sky is falling, the sky is falling, and the sky is falling and if the sky doesn't fall, you're at a disadvantage. >> katty. >> the polls, people are just not engaged and interested in the story and worried about the fiscal cliff. a number of people who know what the sequester is who have heard of it are very small. the president is saying the sky is falling and they say they don't know what you're talking about -- chris: remember the o.j. jury was sequestered.

>> he still runs the bigger risk if what he is saying comes true, if people find that they can't make it because the lines are so long. that's the bigger risk for him. >> he is playing it like a fiddle. if he gets into trouble, he'll take control of whatever agencies, we're doing this because i'm the commander in chief. chris: does he risk looking like nero? >> there is absence of leadership that he has a lot of room. chris: thanks for a great roundtable. that's the show. thanks for watching. see you back here next week. get whatever you want, baby. hmm. let's just share a 20 piece. [ internal ] 20 mcnuggets, for only $4.99? oh, man. she's beautiful smart and sensible. jackpot. [ crewperson ] anything else?

[ male announcer ] mcdonald's crispy, juicy chicken mcnuggets are now part of the extra value menu. so you get the tastes you love at a price you'll love even more. guess who's going to the game? [ internal ] thank you. [ male announcer ] the simple joy of having more to love.

hi, everybody. welcome to "on the money." i'm maria bartiromo. stocks hitting the five-year highs. why the markets don't care about the sequester, but you would. big moves, big money, big politics. >> we should not have to move a third bill before the senate gets off their ass and begins to do something. >> but everybody has gone home for the weekend. government fights crisis and nothing gets done. and the memoirs of the music mogul. legendary clive davis, the hit maker who has worked with everybody from johnny cash. amazing stories from an amazing era. "on the money" begins right now. this is america's number one financial news program, "on the money." now, maria bartiromo.

>> here's a look at what's making news as we are headed to a new week "on the money." the fed is rescuing the markets and investors. federal reserve chairman ben bernanke are saying interest rates will stay low. inflation is not an issue and he is not concerned about eventually raising those rates. the markets were thrilled by the news of having a best two-day streak in the year. dow and federal reserve president richard fisher told me the fed is very aware of what the stock market and the economy are doing. >> we have been the source of fuel for whatever recovery we've had. but i think there are limits and there's also a danger of our becoming defendant, i call it monetary ritalin. it served a purpose and it is a delivered effort to raise the markets so that we have a wealth effect the thing goes down to the people. but we haven't seen employment expand and that's part of our mandate given to us by congress. so i think it's time to really